SBP: Cash Still Dominates High-Value Payments in Pakistan

While digital payments in Pakistan continue to grow rapidly, a major challenge persists: high-value transactions remain largely paper-based.

According to the State Bank of Pakistan (SBP), this trend reflects lingering concerns around trust, usability, and accessibility in digital payment systems for large transfers.

In its Quarterly Payment Systems Review for Q3 FY25, SBP revealed that 89% of all retail transactions were conducted digitally. Yet, these accounted for just 29% of the total transaction value, around Rs48 trillion out of Rs164 trillion.

In contrast, over-the-counter (OTC) and paper-based transactions, despite comprising only 11% of the volume, represented a massive 71% of the total transaction value. This disparity highlights the ongoing reliance on physical channels for larger payments.

Mobile Banking, Wallet Use on the Rise

Digital platforms are seeing solid growth in both users and transaction activity.

• Mobile apps, including branchless banking and e-money wallets, processed 1,686 million transactions worth Rs27 trillion, showing a 16% rise in volume and 22% growth in value.
• Mobile banking users rose to 22.6 million (up 7%), branchless banking wallets hit 68.5 million (up 6%), and e-money wallet users climbed to 5.3 million (up 12%).
• Internet banking users reached 14.1 million (up 7%), though their transaction value growth remained modest.

Legacy systems like call centers and IVR-based banking are becoming obsolete, raising concerns about financial accessibility for less tech-savvy users.

E-Commerce and Merchant Payments Gaining Momentum

E-commerce payments saw a 40% jump in volume to 213 million transactions and a 34% increase in value to Rs258 billion.

• Digital wallets dominated with a 94% share by volume (199.1 million transactions).
• Card-based online payments contributed just 6% (13.5 million).
• In-store, 140,861 merchants handled 99 million transactions worth Rs550 billion using 179,383 point-of-sale terminals.
• QR-based payments reached 21.7 million transactions totaling Rs61 billion.

Raast and RTGS Boost Instant and Large-Value Transfers

SBP’s real-time payment infrastructures are playing a vital role:

• Raast processed 371 million transactions worth Rs8.5 trillion in Q3, bringing total volumes to 1.5 billion and values above Rs34 trillion.
• RTGS managed 1.5 million large-value transactions amounting to Rs347 trillion.

However, Raast’s person-to-merchant (P2M) feature is still underutilized, recording just 1.5 million transactions worth Rs4.5 billion, despite the onboarding of 770,000 merchants.

Challenges to Full Digital Adoption

Despite steady progress, key obstacles remain:

• Overdependence on cash for large payments
• Underdeveloped credit infrastructure
• Unequal digital access in rural vs. urban areas
• Lack of interoperability among platforms

These challenges continue to limit financial inclusion and widespread digital adoption, despite SBP’s policy initiatives and growing participation from banks, fintechs, and service providers.